It didn’t take much time for Vishal Yadav, an agriculturist in Bhamra village of Uttar Pradesh’s Bulandshahr district, to decide to buy his first car. “It had to be a Shahrukh Khan car,” recalls Yadav, who went to the nearest rural sales outlet of Hyundai and bought a Grand i10 in the first week of November. “Now, Shahrukh Khan has come to the village.” Yadav is not the only villager to drive the car endorsed by the Bollywood superstar.

Hyundai, the second largest carmaker in India by volume, has seen its rural sales jump from 14.5% in 2011 to 23.2% in 2016. Rakesh Srivastava, senior vice-president (sales & marketing) Hyundai Motors India, attributes this to a growing economy that has substantially scaled up business avenues in rural markets. Rising purchasing power of customers, coupled with higher disposable income, has opened a door of opportunity.

In 2015, over 24% of Grand i10, 21% of i20 and 19% of Eon sales came from rural and semi-urban markets. These markets account for over 30% of the sales for India’s biggest carmaker, Maruti. Experts are not surprised to see auto brands rushing to the hinterland. Hurrying them along is the grim reality of urban India: choked city roads, people opting for car shares and taxi services and cars — unless a Merc or BMW — losing some of the flaunt value.

Even Mercs are looking further afield. “We have seen the markets beyond metros grow in the last 5 to 10 years; hence our marketing strategy has evolved to address them,” says Michael Jopp, VP - sales and marketing Mercedes Benz India. Jessie Paul, founder of marketing advisory firm Paul Writer, contends that growth of car ownership in Indian cities is unlikely to follow the pattern of developed economies or even China.

The lack of infrastructure juxtaposed with the sharing economy is likely to cause ownership saturation much earlier. Urban India, she predicts, may move directly to a developed public transportation system. “As such, rural India looks more promising at least for the next decade,” she says.

Nissan, which started its India journey five years back, is also gearing up to make most of this opportunity. “Datsun redi-GO has been selling well in tier III and rural markets like Solan, Muzarffarpur, Chhindwara and Nagercoil,” says Arun Malhotra, managing director of Nissan Motors India. Recently, rural India has seen a phenomenal change in consumption patterns, which now resemble those of urban consumers. “Rural consumers are more aspirational and strive to purchase branded and high quality products,” he adds.

While Nissan has a market share of over 2%, it sees a significant contribution from tier II, III and rural markets in its push to take its share to 5% by 2020. Auto experts reckon low penetration of cars in rural India — just four cars per 1000 people — make it a handsome market. “A car is still a status symbol and has aspirational value in rural India,” says Subrata Ray, senior group vice president at ratings firm ICRA. There are certain customer segments who can afford to splurge on luxurious goods and swanky cars.

Plus of late, carmakers have focused on two big concern areas which earlier impeded growth: proximity to a service centre and maintenance cost. They are educating customers and improving awareness, or showcasing products in mobile vans at rural fairs and other local events. “Availability of financing in rural areas was also a challenge few years back, which is now addressed to a large extent,” adds Ray.

But do carmakers need to learn new tricks? From a psychographic point, Paul of marketing advisory firm Paul Writer, observes, a person in rural India watches the same movies, buys the same clothes, eat the same food as his urban counterpart with similar income. And so in communication terms, changes may be unnecessary. “It is more in terms of acknowledging realities of rural roads, longer trips, larger families and better parking,” she says.

Srivastava of Hyundai, for his part, is already working on a rural-centric approach with a dedicated team to understand the market, spot new trends, identify customer preferences and create innovative strategies to increase awareness and sales. However, all these efforts might come to a naught as demonetisation threatens to send the hinterland drive careening off the road.

A bunch of carmakers, including the likes of Maruti and Hyundai, are reportedly scheduling shutdowns which might last as long as 15 days to cope with cash crunch. The worst market to hit, at least in the near and medium term, is rural since most consumers use cash to buy cars. It’s particularly ironic considering a favourable monsoon was expected to trigger a rise in discretionary spend according to ICRA’s Ray.

And this could just be the beginning of troubled times. As Ray points out, “The cash flows for the farming community depend on kharif crop sales that commenced in October and November. The cash crunch would have impacted realisations. And so farmers may have resorted to low-yielding seeds saved from earlier produce for Rabi sowing as against purchasing higher quality seeds. This in turn could impact the productivity.”

All of which is likely to have an cascade down to rural income in the next season too. Will demonetisation end the fairytale growth of carmakers in rural areas or can carmakers bounce back? Well, the picture will become clear early next year. Till then, carmakers can keep humming John Denver’s classic: Take me home, country roads.

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.